Cabinet to decide on Infraco licence

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 06 Sep 2007

Cabinet's decision on whether the Electronic Communications (EC) Act should be amended to assist in speeding up Infaco's licensing is expected today. This will allow Parliamant to finalise the law that will govern the state-owned enterprise.

Parliament's public enterprises committee had all but wrapped up its deliberations yesterday on the Bill that will govern new state-owned-enterprise Infraco. It is now waiting for the final draft before voting on it next week.

Earlier this month, the public enterprises committee requested the communications committee to request an amendment to the EC Act and Cabinet has to give its approval. Should it be granted, the EC Act amendment should be promulgated early next year.

The Department of Public Enterprises (DPE) originally proposed that Infraco be "deemed" to be licensed. This means the new enterprise would be considered to have met all the procedures and conditions that a licence of this nature requires, without having gone through the actual process.

While the state law advisor considered this option to be constitutional, the parliamentarians felt it could be problematic and may open the procedure to legal challenges from companies already playing in the telecommunications space.

Yunis Carrim (ANC), public enterprises committee chairperson, has emphasised since the start of the public hearings that little should be left to chance, meaning potential legal action in the formulation of the law.

"We would not be doing our job as Parliament if we pass a law that is subject to challenge," he said.

Issues of servitude

DPE director-general Portia Molefe said during the public hearings that she does not mind how Infraco is licensed, as long as the process is swift. Molefe also stated Infraco would accept all licence conditions that may be stipulated by the regulator, the Independent Communications Authority of SA.

MP Eric Kholwane (ANC), a member of both the public enterprises and communications committees, says the Infraco Bill's wording, concerning the servitude rights the company will have as a state-owned enterprise, will need to be corrected.

Servitude is a right of government to appropriate property that is needed to build infrastructure of national importance.

Kholwane also said the committee must still finalise what schedule of the Public Finance Management Act Infraco will fall under. The choices are that if it is listed as a Schedule 3B company (such as Sentech), finance minister Trevor Manuel will have the final say over how the company is able to raise financing. If it is a Schedule 2 company (as the DPE wants), then Infraco will have more autonomy in raising finance.

Once the committee has signed off the Infraco Bill on 14 September, the legislation will be voted on in the National Assembly on or around 20 September.